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| Barun Roy: Laos powers ahead | |
| Abundant in hydropower resources, it has taken on the role of a 'battery' for its electricity-starved neighbours | | Barun Roy / New Delhi March 11, 2010, 0:40 IST | |
Later this month, after four years in the making, Laos’ biggest hydropower plant so far, Nam Theun 2, will start producing electricity and selling almost all of it to Thailand. With this will further expand the landlocked country’s reputation as the “battery” for South-East Asian nations and its novel way of earning money for its development.
Also, to go into operation soon is another Thai-related hydropower station, the 615-MW Nam Ngum 2, while 17 other surrogate projects are at various stages of planning. At least 45 more projects are being studied for feasibility with the primary objective of exporting electricity to neighbouring countries and earning much-needed foreign exchange.
For Laos, it makes great sense. Its hydropower resources are among the largest in the sub-region but it doesn’t have the means to develop these resources on its own. At the same time, its neighbours, mainly Thailand and Vietnam, undergoing rapid economic growth, are acutely starved of electricity. So, why not call in the neighbours and ask them to set up power stations and buy back all the electricity produced by these plants for a guaranteed number of years?
It’s excellent regional cooperation too, and, chaperoned by the Asian Development Bank (ADB), it’s working very well. Of course, Thailand has been buying electricity from Laos since 1971 while Laos gets low-voltage power from Thailand to supply its border areas. But the trade got bigger in 1993 when Bangkok signed an agreement to import up to 1,500 MW of electricity a year from Laos. Through a series of new agreements that followed, Thailand’s annual commitment now stands at 5,000 MW till 2015 and 7,000 MW thereafter.
This resulted in the 214 MW Theun-Hinboun project, Laos’ first power joint venture with the private sector. It went into operation in 1998, cost $280 million, involved Thai and Swedish investors and is now being expanded. A year later came the 152 MW Houay Ho plant in the southern Attapeu province.
Construction of the $1.2 billion, 1,088 MW Nam Theun 2 plant on Nam Theun River, a major Mekong tributary in central Laos, began in 2005, ahead of the 523 MW Nam Theun 1, with investments from Electricite de France (35 per cent), Lao Holding State Enterprise (25 per cent), Electricity Generating Authority of Thailand (25 per cent) and Italian-Thai Development Public Co of Thailand (15 per cent). Ninety-three per cent of its production is slated for export to Thailand, and it’s estimated Laos will earn over $2 billion from this venture alone over the 25-year life of the concession.
It’s only natural that the success of the power arrangement with Thailand should encourage Vietnam too, whose energy needs are also growing by leaps and bounds. According to agreements concluded so far, Vietnam will import 2,000 MW of electricity from Laos and has lined up a number of projects for achieving that goal. The biggest of these is a 1,400 MW plant in Luang Prabang proposed by Petro Vietnam, while a 210 MW station, Sekaman 3, is being built in Sekong province. Last month, representatives of the two governments met and agreed to speed up the projects.
As the demand for energy rises throughout the Greater Mekong Sub-Region, averaging 10 per cent to 16 per cent a year over the next decade and in step with its fast growing economic activities, Laos’ “battery” role is destined to get even bigger in future, and it’s only a matter of time before Myanmar, blessed with similar huge untapped water resources, also decides to join the game. ADB, the architect of cooperation in the Greater Mekong area, is now helping develop regional transmission networks to put the regional power trade on more solid ground. A Regional Power Trade Coordination Committee has been formed to oversee various aspects of the trade and develop common standards.
A $20 million ADB technical assistance grant will help develop the first module of the sub-region’s northern power transmission project. Though mainly intended to boost domestic supply through 400 km of 115 kV transmission lines, the project will also provide a cross-border interconnection with Thailand. But the major focus is on building a network of 500 kV transmission interconnection, which include the following: (1) Jinghong (China) to Luang Namtha (Laos) to Thailand; (2) Luang Prabang (Laos) to Vietnam; (3) Hating (Vietnam) to Nam Theun 2 (Laos) to Thailand; (4) Pleiku (Vietnam) to Ban Sok/Attapeu (Laos) to Thailand; and (5) Tay Ninh province (Vietnam) to Strung Treng (Cambodia) to Attapeu (Laos) to Ubon Rat (Thailand).
When this basic network comes to be in place, not too far in the future, regional cooperation will acquire a different meaning in the Greater Mekong area. South Asia could have been another territory fit for a similar experiment in neighbourly living, with Bhutan and Nepal taking on the role that Laos plays, but there’s simply not the right political desire that could make it happen.
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